Latest study: Ohio-style Medicaid may save $1B a year

Even if your eyes glaze at the mere mention of Medicaid, this might widen your peepers: Ohio's revamped setup is saving taxpayers $1 billion annually — and the amount is growing.

And a new study shows it's providing better, more-comprehensive care to 2.5 millions Ohioans — roughly 90 percent of those getting health-care coverage under the state-federal program for the low-income, blind or disabled.

That's what has happened with the growing presence of managed care in recent years for the most-expensive portion of the state budget, according to an 85-page tome titled "The Impact of Private Industry on Public Health Care: How Managed Care is Reshaping Medicaid in Ohio."

For example, by adding prescription drugs to the managed-care mix, Ohio's Medicaid outlay was 13.3 percent below the collective average costs of states without prescription managed care — savings on top of the $1 billion.

The image of managed care as a penny-pinching threat to someone getting the quality health care they need is outmoded, said leaders of the group that sponsored the study, the Ohio Association of Health Plans.

"The managed-care system of old is more and more out the door and in the rear-view mirror," spokesman Sam Rossi said. "These plans are bringing some real private-sector expertise and best practices.”

Miranda Motter, the group's president and CEO, said managed care now emphasizes health "outcomes" — helping someone get better — rather than simply cutting costs. The scope has increased to coordinating care ranging from social workers to pharmacists; assessing the employability of Medicaid recipients; checking whether they are getting proper nutrition — including an occasional glance in their fridge; making sure they are taking care of preventative procedures, from prostate exams to annual physicals; and getting them signed up with a primary-care doctor instead of using the emergency room for routine medical needs.

"The report shows innovation and best practices, along with accountability through managed care, have improved quality and outcomes, and it (has) ultimately then improved the cost for Ohio’s taxpayers," Motter said.

Her group represents 15 member plans providing health-insurance coverage to more than 9 million Ohioans

The state also sings the praise of the current setup.

“Under Gov. Kasich’s leadership, Ohio is modernizing its Medicaid program by replacing an antiquated fee-for-service model with a system that better coordinates care and allows us to both measure and reward quality,” said Ohio Medicaid Director Barbara Sears.

“While we’re still reviewing this report, we know improved care coordination leads to better health outcomes and lower costs for taxpayers, and we look forward to continuing to work with our managed care partners to build a sustainable system that ensures Ohioans receive the care they need.”

Support from the Ohio State Medical Association was more measured.

“We remain supportive of the governor’s determination to move away from fee-for-service to a value-based system that rewards primary-care physicians who keep people healthy, which managed care helps to administer. No concerns with the bottom-line goal,” said Reginald Fields, director of external and professional relations for the doctors group.

“However, there are still some basic administrative challenges with the managed-care companies that creates a burden for physicians, such as getting doctors credentialed, paying claims and clearing prior authorization hurdles. The report didn't mention these.”

The study found that from 2013 through 2015, managed care saved between 8.9 percent ($2.5 billion) to 11.3 percent ($3.2 billion) over what Medicaid costs would have been under a traditional fee-for-service model.

Within the next couple of years, the savings should grow because virtually all Medicaid recipients — including those requiring more costly care — will become part of managed care, Motter said. State officials say 1 percent of Ohio's Medicaid population accounts for 25 percent of Medicaid spending, and 4 percent accounts for 53 percent of the spending.

The study underscores Kasich's longstanding contention that Ohio has become an example for the rest of the nation on the elusive goal of providing better care at lower cost.

"We do think Ohio has served as a model," Motter said. Already, other states have “Ohioized” portions of their health-care setup, she added.

drowland@dispatch.com

@darreldrowland

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